Webware

The industry P.R. frenzy over scams in ads and offers on social networks goes on: Facebook announced on Thursday evening in a post on its developer blog that since it updated its developer platform terms of service this summer, it has disabled two ad networks that it says were running deceptive advertisements.

This comes in the wake of allegations that some companies that power offer- and survey-related moneymaking operations for social-gaming applications on platforms like Facebook's have effectively been scamming users into paying for services without disclosing those costs. One of them, Offerpal Media, has been particularly visible in the crosshairs.

"This battle is not new and it's far from over," the post by Facebook's Nick Giano wrote. "We faced stimulus scam ads on our own system earlier this year and pushed them off the site with rigorous enforcement. We did the same months later when deceptive ads from third-party ad networks appeared in applications. We're doing that again now as we see them appear in the form of offers."

Additionally, Facebook--which has said for quite some time that many of the activities highlighted in the "app scam" controversy are already banned by its terms of service--included in the post that more than 100 developer applications have been either "suspended or brought into compliance" over advertising issues, and that more than half of them were used by at least 1 million Facebook members per month. It's not clear whether these were all related to scams, or to other advertising-related infringements like the Burger King marketing campaign that encouraged users to "unfriend" their contacts in exchange for a free cheeseburger.

Facebook representatives declined to name which ad networks or applications it has banned. But the company did ban two companies in June, Social Hour and Social Reach, citing ad network policy violations. It's possible that the two ad networks mentioned in Facebook's blog post were banned months ago, given the "since July" language.

Earlier this week, MySpace--another big destination for social-network apps--announced that it had updated its terms of service to ban app scams. Prior to that, several prominent application manufacturers announced that they had banned potentially deceptive offers, despite the fact that they are responsible for a big chunk of virtual-goods revenues.

An update was made to this post at 7:51 a.m. PT on November 6 to note that Facebook banned two ad networks in June.

It looks like the brouhaha surrounding social-app moneymaker Offerpal Media is bigger than founder Anu Shukla's "sh*t, double sh*t, and bullsh*t" response to the accusation that its business is built on scamming consumers. It's got upcoming developments in two lawsuits, one in which it's the plaintiff and one in which Shukla is a defendant.

VentureBeat's Dean Takahashi reported Thursday that a lawsuit was filed in an Alameda County, Calif., superior court against Shukla and co-founder Michael Liu on behalf of Kevin Halpern, who alleges that he helped found the company and was then shut out. In a court complaint, Halpert says that in exchange for offering his social-networking expertise to what would become Offerpal, Shukla promised him a 15 to 20 percent stake in the company that never came to fruition.

The defendant's motion to dismiss the breach-of-contract suit is scheduled for November 24, according to public court documents. On Wednesday, Offerpal had announced that Shukla would be leaving her post as CEO and would be replaced by digital-ad veteran George Garrick.

But that's not the only legal dispute that Offerpal is in. There's a judicial settlement conference scheduled for Friday in the trademark infringement lawsuit that Offerpal filed against Kickflip, a former customer that went on to create a competing business, called Gambit, according to a person familiar with the court details. The suit was originally filed in April, and the status of a potential settlement is currently unclear because most of the events thus far, as well as Friday's scheduled meeting, have been behind closed doors.

But the reason why Offerpal has been in the news so much as of late has been because of Shukla's public altercation with TechCrunch's Michael Arrington at last month's Virtual Goods Summit in San Francisco. In response to Arrington's allegations that Offerpal's profitable business, used by many social-gaming companies as a way for users to earn virtual goods in-game, actually misleads players into signing up for paid offers and subscriptions.

Following the Arrington-Shukla spat, a number of high-profile names in the gaming and social-networking world came out against developer-app scams and misleading ads. Offerpal maintains that it runs a legitimate business. But it's clear that this company's issues run quite a bit deeper than a single PR fiasco.

Although technology and the Internet have taken a beating in the past for potentially limiting people's social interaction, a new study from the Pew Research Center has found that the opposite might be true.

According to a Pew Internet Personal Networks and Community survey, which polled 2,512 adults, the dawn of new technology and the Internet has not caused people to withdraw from society. In fact, the study found that "the extent of social isolation has hardly changed since 1985, contrary to concerns that the prevalence of severe isolation has tripled since then." Pew said that 6 percent of the entire U.S. adult population currently has "no one with whom they can discuss important matters or who they consider to be 'especially significant' in their life."

That said, Pew did find that Americans' "discussion networks"--a measure of people's "most important social ties"--have shrunk "by about a third since 1985" from three people to two. However, Pew found no evidence to suggest that it had anything to do with mobile phones or the Internet. In fact, the organization's study found that mobile-phone use and active Web participation yields "larger and more diverse core discussion networks."

Social media is also helping people expand their social interaction. According to Pew, those who use the Internet frequently "are much more likely to confide in someone who is of another race." Users who share photos online are more likely to discuss political topics with someone of a different party, the organization found.

Do you know your neighbor?
Frequent Web users are more likely to communicate with neighbors in person than those who don't use the Web as often, Pew found. In fact, 61 percent of respondents said that they talk to a neighbor at least once per month. The study also found that bloggers are 72 percent "more likely to belong to a local voluntary association" than those who don't blog.

Perhaps most important, Pew found that just because someone is a heavy Web user, that doesn't mean they remove themselves from traditional social activities like visiting a restaurant or hanging out at a bar on a Friday night. According to the study, Web users are "45 percent more likely to visit a cafe, 52 percent more likely to visit a library, 34 percent more likely to visit a fast-food restaurant, 69 percent more likely to visit other restaurants, and 42 percent more likely to visit a public park." Later on, the study reported that social-networking users "are 40 percent more likely to visit a bar, but 36 percent less likely to visit a religious institution."

So, next time your grandmother tells you that the Web is ruining the world, you might want to tell her to check out Pew's study. For more on these figures and many more, click here.

Offerpal Media, a company that helps social-network app creators make money from offers and surveys, on Tuesday announced that it had replaced its CEO in the wake of a high-profile onstage argument at a conference and subsequent press over whether it's scamming consumers who fill out offers in order to earn virtual goods in social games.

Anu Shukla, who founded the company and had been serving as CEO since its 2007 launch, will be replaced by George Garrick, who has served as the CEO of Flycast Communications, Wine.com, Jingle Networks, and Mochi Media. Shukla "will still be involved and help guide the company," an Offerpal representative told CNET News.

A statement from Shukla makes it sound like the company's been CEO-hunting for months ("I have known George for a long time...After many months of searching, I believe that George is the best CEO to scale the company to new heights. I am looking forward to working with him closely"). But the timing is a little too good to be coincidental: a firestorm erupted over Offerpal and other companies in its niche after TechCrunch's Michael Arrington confronted Shukla while she was on a panel at the Virtual Goods Summit in San Francisco last month. Arrington accused Shukla of running a scam operation that tricks consumers into unwittingly spending money--and of course, he then blogged about it.

Shukla's response to Arrington was "sh*t, double sh*t, and bullsh*t."

But the industry has taken the controversy seriously. Social game makers like the massive Zynga have come out and said that they would ban potentially shady and misleading offers, even though those might make up a sizeable chunk of revenue, and on Tuesday social network MySpace joined the debate and said that it had modified its terms of service to outlaw "app scams."

Shukla was interviewed by VentureBeat's Dean Takahashi in a lengthy article published on Tuesday.

This post was expanded at 4:55 p.m. PT.

Facebook's "like" feature has been around since February, but the massive social network never provided users with a way to quickly voice their opinions going the other way. French developer Thomas Moquet took matters into his own hands by creating a cute (albeit useless) Firefox extension that adds a dislike button to Facebook, letting users who have it installed mark things they don't like.

In order to make the tool work, Moquet had to use his own servers, which keep track of every item that's disliked as well as who clicked it. Any other Facebook users who have the extension installed can then see who disliked it right next to the usual like list.

Feeling grumpy? Add a "dislike" button to Facebook.

(Credit: CNET)

There are a few very clear downsides to this system, one being that if the dislike servers ever go down, you won't be able to see what you or others have marked as not liking. It also cannot be seen by other users who don't have the extension installed. Nonetheless, it fits in quite well with the rest of the Facebook interface, peacefully coexisting alongside the likes while adding a bit of snark.

It's worth noting Facebook's exclusion of a dislike button was under the pretense that likes were added as a quick way to replace simple one-word comments. By adding a like button the hope was both to better surface content in its news feeds, as well as cut down on throwaway comments like "this is great!" or "cool."

Facebook dislike is an experimental add-on, meaning you'll have to grab it from Mozilla's add-ons site. See also the competing Facebook Dislike Button add-on, which goes one step further and will actually send the person who's news item it is a Facebook note saying that you didn't like what they posted. Ouch.

Social news site Digg is experimenting with a new way to give upcoming stories a chance at the limelight with an experiment the company is calling Digg Trends.

Stories that begin to experience a heightened amount of user interest in the form of off-site sharing, user discussion, and of course Diggs, will be presented up at the very top of Digg's home page, as well as being spouted in a special RSS and Twitter news feed. Once at the top of the page, those stories have 10 minutes to get voted onto the front page as a normally dugg story, otherwise they're buried into Digg's dead pool. All the while a giant counter ticks down how much time the story has left.

Along with the countdown timer, Digg is also putting forward some of its outgoing traffic numbers. Users can see how many clicks a trending story has gotten from the front page. Normally, the only other traffic numbers you see on a Digg story is when you're on the source site itself, though users must have the DiggBar enabled.

Trending stories get just 10 minutes to prove their worth like any other front-page story. The company is also making available how many users have clicked to view the source content.

(Credit: Digg)

This new system is a stark difference from the somewhat nebulous promotion algorithm that exists for regular stories. Under the current system, stories have to earn their way onto the front page which involves standing out among an ever-growing pool of other upcoming stories. The company made this process a little more custom-tailored with the introduction of its recommendation engine, but it still requires that users actively visit that part of the site to see what's new. The new trending idea puts some of those stories up for everyone--and right on the front page.

In a company blog post about the new process, Digg's senior software engineer Kurt Wilms called it an "experiment," and said that it could change based on user feedback. Some Digg users have already voiced their opinions in the posting's comment section, citing that "bury brigades" (groups of highly opinionated users) could keep some stories from ever making it past their 10-minute window. The end result being that a story that could have legitimately made the front page on its own gets shut down before ever having a chance under the normal algorithm.

As with other new features, Digg seems to be rolling out Trends slowly, and to a small group of users. I'd expect it to show up for everyone in the next day or two.

In the wake of a firestorm over just how much of social-gaming companies' profits can be attributed to potentially scammy offers and incentives, News Corp.'s MySpace has taken a stand (and, it could be said, taken advantage of the PR opportunity) by coming out vocally against them.

"We're adding a fifth principle (to our developer terms of use) that clarifies a specific use case that we feel is particularly damaging to the user experience: promotions that include hidden renewals without specific opt-in will not be permitted," a company blog post by CEO Owen Van Natta read. "Because it's our belief opt-out offers are misleading and do not have the best interests of the users in mind, we will be updating our Terms of Use this week to better clarify this for users and developers."

What exactly is he referring to? In many of the most popular (and profitable) games built for big social-networking platforms like Facebook and MySpace, players can progress faster in the game by either buying virtual goods with "real" money, or by completing offers and surveys from a partner company like the prominent Offerpal Media. Critics say that many of these offers aren't actually free, and unwittingly can sign users up for expensive subscriptions or programs.

After a public confrontation between TechCrunch's Michael Arrington and Offerpal CEO Anu Shukla at last week's Virtual Goods Summit event in San Francisco, game makers like Zynga and RockYou put out statements saying that they're cracking down on offers that are potentially misleading.

Could this lead to real industry changes? Yes. But keep in mind that Facebook, the biggest destination for these social games, already bans this stuff in theory. "Ads cannot be deceptive or fraudulent about any offer made," the company's advertising guidelines read, and adds "if an ad includes a price, discount, or 'free' offer...the destination URL for the ad must link to a page that clearly and accurately offers the exact deal the ad has displayed (and) the ad must clearly state what action or set of actions is required to qualify for the offer."

But judging by the amount of sketchiness that allegedly takes place on the platform, it seems like advertisers aren't necessarily following these guidelines. Whether MySpace's stance against them can lead to a legitimate crackdown has yet to be seen.

So how do you say "fail whale" en español? Twitter has launched a Spanish translation, according to a blog post Tuesday (in Spanish) by co-founder Biz Stone.

It's the first of multiple volunteer-assisted translations for the microblogging site, the post explained. A look at Twitter's public timeline will show that it's used in many languages across the world, but until this point, the Twitter.com site has been English only. Now, users can go into their settings to translate it into Spanish.

This could be key as Twitter attempts to grow bigger overseas amid allegations that its traffic has plateaued. Facebook, for example, saw significant growth overseas when it started launching user-translated versions of its site.

To better inform the Twittering masses, we have gone to the trouble of plugging the term "fail whale" into Google Translate to see how you say it in Spanish. That didn't go too well with the algorithm, so we tried "whale of failure" and came out with "la ballena de fracaso." Unfortunately, that just doesn't have the same ring.

But this is not actually the first time that Twitter has toyed with launching a non-English edition. Last year, Twitter board member Joi Ito hyped up the launch of a standalone Twitter Japan site, powered by an investment from Ito's Digital Garage, that was notable because it was ad-supported (Twitter still hasn't rolled out ads or even said that it will for sure).

Biz Stone filled in CNET News on the status of Twitter Japan via e-mail on Tuesday night: "(It's) doing very well. A few of us were there a few weeks ago to launch a brand new mobile service. We had a really fun tweetup in Tokyo."

Twitter hasn't said what the next translations of its site will be, though presumably they'd pick a language that's already spoken by many users or one spoken in a region where it hopes to make big inroads. Or they could just be cutesy and launch in Klingon or Pirate.

This post was updated at 10:40 p.m. with comment from Biz Stone.

PayPal is preparing to launch a new payment system that simplifies the process of buying products from within an online application, The Wall Street Journal is reporting.

According to the report, the new service will be called PayPal X. It will allow users to sign in to their PayPal accounts and purchase products from within a respective application.

The service, which has reportedly been in limited testing, is eBay's best hope for capitalizing on the burgeoning in-app payment market, which has witnessed Facebook emerge as one of PayPal's strongest competitors.

According to The Wall Street Journal, Facebook's in-app currency, Facebook Credits, is now being considered by many developers that are lured by the social network's size and reach.

Sebastien de Halleux, chief operating officer of social-gaming company Playfish, told the Journal that his company is trying out Facebook Credits to possibly replace PayPal. He told the Journal that Facebook's service "can create a lot of value by reducing friction and allowing many more people to spend money." It also helps that Facebook's system, unlike PayPal, is built into the social network.

With PayPal X, it seems the online-payment company is trying to stay relevant in a market that is becoming increasingly complex (and crowded). It should be interesting to see if PayPal X can help PayPal stay relevant--and compete with Facebook.